20150506-大华继显-Regional_Morning_Notes_29页_1mb

报告摘要

Regional Morning Notes Summary - 06 May 2015

Core Content Overview

This document provides a detailed analysis of the regional financial markets and key companies in Southeast Asia, focusing on the palm oil sector, stock market strategies, and investment recommendations. It also includes updates on company results, sector outlooks, and market indices.

Main Points

1. Key Story: China and Shenzhen-Hong Kong Stock Connect

The Shenzhen-Hong Kong Stock Connect is expected to launch in 2H15, which will increase liquidity and allow investors to access small-mid cap stocks in Hong Kong.
It is recommended to buy Hong Kong-listed small-mid cap stocks ahead of the launch, as they trade at 22.0x PE, which is significantly lower than Shenzhen's 46.4x PE.
Certain sectors such as IT and financials are expected to see A-H premium convergence due to the Connect.

2. Regional Sector Update: Plantation

Bearish outlook for palm oil prices due to:
- Supply shock from a stronger-than-expected production recovery.
- Disappointing demand for palm oil.
- Narrowed spread between soybean oil and palm olein.
- Delay in Indonesia's biodiesel mandate.
Pertamina tender is identified as a turning point to watch, as it may trigger demand for 2m tonnes of palm oil.
CPO price forecast has been revised to RM2,100-2,300 for now and RM1,900 after July.
Demand will be the main focus for 2015, with 6m tonnes of palm oil needing to be redirected to new markets.
El Nino conditions could lead to severe drought in Southeast Asia, potentially reducing production in 2016.

3. Company Results

Kalbe Farma (KLBF IJ/HOLD/Rp1,825/Target: Rp1,665)

1Q15 Net Profit: Rp529b, up 7.2% yoy but down 8.5% qoq.
Revenue Growth: 4.4% yoy, but -7.9% qoq.
Net Profit Guidance: Reduced from 14-16% to 9-11% yoy.
Performance Drivers:
- Pharmaceutical revenue up 5.1% yoy.
- Consumer health revenue up 12.4% yoy.
- Nutritional sales up 13.6% yoy, but gross profit only up 9.9% due to margin compression.
- Distribution sales down 8.1% yoy due to discontinued distributorship with a third-party principal.
Maintain HOLD due to high sector multiples and the recommendation to switch to SILO, which has outperformed KLBF.

4. Market Indices Performance

Index	Prev Close	1D %	1W %	1M %	YTD %
DJIA	18070.4	0.3	0.2	1.7	1.4
S&P 500	2114.5	0.3	0.3	2.3	2.7
FTSE 100	6986.0	0.4	-1.2	2.2	6.4
AS30	5815.9	0.3	-2.3	-0.9	7.9
CSI 300	4787.7	0.8	1.8	14.8	35.5
FSSTI	3482.7	-0.1	-0.9	0.8	3.5
HSCEI	14459.2	0.2	-0.2	14.2	20.6
HSI	28123.8	-0.0	0.2	11.3	19.1
JCI	5141.1	1.1	-5.4	-5.8	-1.6
KLCI	1818.3	-1.3	-1.5	-0.4	3.2
KOSPI	2132.2	0.2	-1.3	4.2	11.3
Nikkei 225	19531.6	0.1	-3.2	0.5	11.9
SET	1526.7	0.3	-1.2	0.1	1.9
TWSE	9845.0	0.3	-0.7	2.5	5.8
BDI	587	-0.7	-2.2	-0.2	-24.9
CPO (RM/mt)	2071	-1.0	-4.6	-4.2	-9.8
Nymex Crude (US$/bbl)	59	-0.1	3.2	19.9	10.6

5. Top Picks

BUY

Beijing Capital (694 HK): CP 8.19, TP 12.30, Pot. +/- 50.2
ICBC (1398 HK): CP 6.69, TP 7.80, Pot. +/- 16.6
Bank BJB (BJR J): CP 880.00, TP 1,300.00, Pot. +/- 47.7
Maybank (MAY MK): CP 9.21, TP 10.30, Pot. +/- 11.8
DBS (DBS SP): CP 20.82, TP 25.08, Pot. +/- 20.5
Pacific Radiance (PACRA SP): CP 0.71, TP 1.06, Pot. +/- 49.3
Krung Thai Bank (KTB TB): CP 20.00, TP 27.00, Pot. +/- 35.0
Sino Thai Engr (STEC TB): CP 20.90, TP 30.25, Pot. +/- 44.7

SELL

UMWH Holdings (UMWH MK): CP 10.64, TP 10.00, Pot. +/- -6.0

6. Key Assumptions

Country	2013	2014	2015F
US	1.9	2.4	3.2
Euro Zone	-0.4	0.9	1.4
Japan	1.5	1.5	2.0
Singapore	3.9	3.2	3.3
Malaysia	4.7	5.9	5.2
Thailand	2.9	1.5	3.9
Indonesia	5.8	5.2	5.8
Hong Kong	2.9	3.5	3.7
China	7.7	7.2	7.0

Commodity	2014	2015F	2016F
Brent (US$/bbl)	99.45	65	70
CPO (US$/mt)	722	765	788
BDI	1,101	1,300	1,400

7. Corporate Events

Sunsuria Roadshow: Singapore, 6 May
BMI International Luncheon: Hong Kong, 7 May
JCY International Luncheon: Kuala Lumpur, 14 May
SIN Telcos, SIN Banks & INDO Telcos Analyst Presentation: Taipei, 28 May
Indosat Roadshow: Kuala Lumpur, 27 May; Singapore, 28 May; Taipei, 29 May

8. Analysts

Regional Research Team
- +603 2147 1988
- research@uobkayhian.com
Frank Xu
- +852 2236 6794
- frank.xu@uobkayhian.com.hk
Teenie Fung
- +852 2236 6798
- teenie.fung@uobkayhian.com.hk
Tham Mun Hon, CFA
- +852 2236 6799
- munhon.tham@uobkayhian.com.hk

9. Sector Catalysts

Crude oil prices: If crude oil prices recover above US$80/bbl, non-mandated biodiesel demand could return.
El Nino conditions: May lead to drought in Southeast Asia, affecting palm oil production in 2016.

10. Company Performance

Kalbe Farma (KLBF IJ)

Market Cap: Rp85,547.1 (US$m: 6,549.3)
3-mth avg daily turnover: US$m 6.1
GICS Sector: Health Care
Major Shareholders:
- Gira Sole Prima: 8.6%
- Santa Seha Sanadi: 8.6%
- Diptanala Bahana: 8.6%
FY15 NAV/Share: Rp204
FY15 Net Cash/Share: Rp19
Price Performance:
- 1mth: -2.1%
- 3mth: 0.0%
- 6mth: 8.6%
- 1yr: 17.0%
- YTD: -0.3%

11. Conclusion and Recommendations

Plantation sector remains bearish with no strong catalysts expected in the short term.
Wilmar International (WIL SP) and Sime Darby (SIME MK) are recommended for long-term investment due to strong cash flows and dividend potential.
Maintain HOLD for Kalbe Farma (KLBF IJ) due to high sector multiples and lower-than-expected growth.
Investor focus should be on small-mid cap stocks in Hong Kong ahead of the Shenzhen-Hong Kong Stock Connect launch.
CPO price assumptions are under review, and a 10% cut could lead to an earnings decline of 11-23% for upstream players and 4-8% for integrated players.